Bad News for Silver, Courtesy of Seeking Alpha [w/ edit]

Short-term headwind against silver courtesy of SeekingAlpha

Note that this article was written before silver recently slid back below its daily SMA 50.

See Silver is Back

Did it ever go anywhere?

As the stock market continues to fly in the face of gold and silver bugs, not to mention market perma-bears…

…they have not given up the ship and thrown in the towel. I noted as much in mini NFTRH 633 as the Investors Intelligence reading (of newsletters) is getting epic over-bullish but not quite yet to the January 2018 ‘bull killer’ level, owing not to the bulls, who are fully aroused, but to the bears who are not quite ready to throw in the last tattered, soiled towel.

So too will a towel need to be thrown (and then retrieved to wipe off the puke) by the gold “community”, under which roof also reside the lunatic fringe of said community, the silver bugs (listen my silver buggy friends, I know you have a sense of humor). In the conventional gold bug brain it should be no more complicated than USD down, gold and silver up. But today the anti-USD inflation is serving stock markets perfectly while the precious metals head to Pallookaville and a buying opportunity.

The article linked above goes into the usual reasons why silver is a steal right now (undervalued vs. gold, undervalued vs. inflation metrics, silver’s chart is still intact, FOMC is meeting and monetary and fiscal inflators gonna inflate, etc.). But you can insert here some mitigating words about silver being part commodity and part precious metal, about above-ground silver being incredibly abundant, about this, about that. I am not really critical of the article because I also believe silver is going to tear ass when this correction is over.

But in the bug “community” sentiment is everything. If bugs are perplexed about why gold is not going up against the bearish US dollar they must be doubly so about silver. Yet in the comments to this article many of the girls are still in full frontal pom pom mode, cheering the article writer on.

If you know SeekingAlpha you know that it is often the commenters who are the stars because a more wrong-way bunch of contrary indicators I have rarely seen (with a few right minded ogres sprinkled in for good measure).

So anyway, I am waiting for silver to at least accomplish a minor downside objective before pulling out my own pom poms, as the precious metals are now in much better standing contrary sentiment wise than stocks. But what we want to see now is bleak resignation, not bullish forecasting and associated glad handing.

On balance, this favors the continued correction scenario in the short-term. The bugs need to get so thoroughly pissed at the declining US dollar and the precious metals’ failure to pick up on that.

Then the setup for the next phase will be in place.

[edit] I took the time to check out the author a bit. He’s a “veteran of the resource market”, a portfolio adviser and he’s headquartered in resource-rich Canada to boot. What’s more, his headlines have been reliably bullish all along the correction. I have not taken the time to read any other articles but author aside, these types of headlines do not typically attend the end of a correction. And there are still plenty of other bugs out there writing bullish things as well. Just saying…

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